Makhado project economics improved as LoM increases ‘significantly’1 Aug 2023 15:18
Worth a read https://www.miningweekly.com/article/makhado-project-economics-improved-as-lom-increases-significantly-2023-07-31
'An updated life-of-mine (LoM) plan and coal reserve estimate for MC Mining’s fully-licensed and shovel-ready Makhado steelmaking hard coking coal project have significantly increased the LoM and improved the project's economics.
The increased coal reserves in the East Pit at Makhado have resulted in increased saleable tonnes, which was confirmed by the most recent drilling programme.
Since the August 2022 announcement of prefeasibility studies at the project, coal reserves have increased by 53%, with saleable steelmaking hard coking coal reserves having increased by 64% and saleable thermal coal reserves by 57%.
"MC Mining has made significant progress on the Makhado project during the quarter [ended June 30]. The completion of a five-year Makhado implementation plan was augmented by the substantial increase in coal reserves and mine life at much-improved annual production rates.
“This progress bodes well for moving operations down the cost curve, while aiming to take advantage of the favourable near-term steelmaking hard coking coal prices," MC Mining MD and CEO Godfrey Gomwe said on July 31.
The Makhado early works activities continued during the quarter, with funding activities expected to be concluded in the second half of the year. The managed tender processes to select the outsourced mining, plant and laboratory operators also started during the quarter.
The company also continued to progress critical Makhado early works during the quarter, including the start of detailed design, procurement and construction of the power supply overhead transmission line, with construction team mobilised onsite. MC Mining considered this to be a critical path activity.
Additionally, refurbishment of on-site accommodation to house project construction crews was undertaken, as was the placement of orders for key long-lead time items, including the payment of a deposit of R19-million.
MC Mining also achieved the mobilisation of contractors for the construction of the main access road, main bridge and civil works for bulk water reticulation. The company also reported progress with the erection of fencing to secure the project site.
“We are excited to have strong contenders to be our partners, and these processes are expected to be completed during the current quarter.”
The updated LoM for the Makhado plan resulted in a 25% higher yearly mine production rate with a 21.2% yield of saleable steelmaking hard coking coal, up from 19.8%, and 17.6% yield of 5 500 kcal thermal coal, up from 17.2%, thereby allowing for improved project financial returns.
Further, the managed tender processes to select the outsourced mining, plant, and laboratory operators have begun. These are expected to be completed during the current quarter.
Steady progress during the quarter has also been made on critical early works activi
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